Cost Transformation

Case Study: EBITDA Improvement For A Pressure Sensitive Adhesive Manufacturer

RapidĀ EBITDA improvement

The Challenge

A global manufacturer of feedstock for adhesive labels used in a wide range of applications had experienced commoditization over the years in many of their product lines, resulting in price pressure from their customers.

These pricing and competitive issues put pressure on the manufacturer, and some severe turnover at all levels of the organization had even already begun.

In addition, the manufacturer lacked a functioning global procurement organization, and required the development of procurement resources, organization structure, and processes.

Our Breakthrough

Within a short time frame, Oliver Wyman had to develop a holistic and cross-functional view of the operations of the company both from an operational perspective (e.g. plant performance) as well as on the commercial aspects.

We assessed the operations in all the geographies with dedicated teams. Major sources of EBITDA improvement ideas were drawn from plant visits, data analytics across major sourcing categories, and operational KPIs. Opportunities were then generated with a hypothesis-driven approach and tested with key stakeholders.

Our team established four primary sourcing workstreams, covering paper, films, chemicals, and indirect materials and services. Each workstream covered a multitude of sub-commodities and drove a combination of negotiated price reductions with incumbent suppliers, identification of new suppliers, validation plans for new products, make versus buy analysis, and pricing drivers to help the client maintain competitive pricing.

Our Impact

40%+ EBITDA improvement through direct and indirect materials sourcing optimization.